Australians are demanding tough action against terrorism following the bombs in Bali that killed nearly 200 people.

Flags are flying at half-mast and churches have been planning memorial services across the country to mourn the dozens of Australians feared dead.

Bali's holiday image has been shattered

Sunday has been declared a national day of mourning, as Australia tries to come to terms with its bloodiest day since World War II.

"Australia in mourning" said the Sydney Morning Herald, which devoted two thirds of its front page to photos of some of those known to have died or to be missing.

Under the headline "Smiles forever lost" were 25 people who had been enjoying their holidays - surfers, rugby players, families and groups of friends.

In parliament on Tuesday, Prime Minister John Howard said there was mounting evidence that al-Qaeda was involving in the bombing, along with a South-east Asian Islamic group, Jemaah Islamiah (JI).

He said the government would call on the United Nations to have JI listed as a terrorist organisation.

Warning Jakarta

Earlier on Tuesday, Mr Howard kept up pressure on Indonesia to work with Western governments in its investigation and to do more to fight terrorism.

"It will require naturally the 100% commitment of the Indonesian authorities," he told ABC radio.

Mr Howard says Australia should be on alert

The Australian newspaper agreed, saying it was time for the Indonesian president to "get tough".

"It is time for President Megawati Sukarnoputri to turn words into actions and crack down on terrorist groups whatever their ideology or religious persuasion," it said.

But the newspaper said the "atrocity" should also lead to "a strengthening of the international coalition against terror".

"Adversity can be turned into advantage," the newspaper said.

But not all Australians would agree, with some arguing that Australian support for the US-led war on terror has put them at risk.

"Stop making us a target," said one reader in a letter to the Sydney Morning Herald.

"Is it too harsh to argue that the egos of John Howard and (Foreign Minister) Alexander Downer and their desperate desire to be taken seriously on the world stage are responsible for the deaths of so many Australians in this weekend's Bali bombings?" asked another in the Daily Telegraph.

'No warning'

There has been criticism from some Australians that the government did not do more to warn the public about the threat from extremist groups.

Mr Howard has repeatedly warned since last year's attacks in New York and Washington that no nation was immune. But he had not advised tourists to specifically avoid Bali.

The prime minister has denied having any advance intelligence information related to the Bali attack.

"We had no warning of the specific attack that occurred," he told parliament.

But he also said the risk of an attack on Australian soil now seemed more likely since the Bali bomb.